First off, Windows 7 users your disk drives for paging files and system cache. Because reading and writing from the hard drive is slower than reading/writing from/to physical memory, this is what causes performance issues with PCs.
To combat this problem, Microsoft created Readyboost. What ReadyBoost does is it uses a USB or other flash-memory-type device as an external cache. The main reason is because Windows can read flash devices many times faster than your PC's hard drive.
Readyboost doesn't increase the amount of memory you have to use. Instead, what Windows 7 is doing is caching random input/ouput and small, sequential input/output operations rather than large, sequential input/output to the device rather than the hard drive because the flash drive will be faster than your hard disk.
This doesn't mean it pages and caches everything to the flash drive. Only the operations that result in random I/O and small sequential I/O. The main reason for this is because USB flash devices are better suited to random I/O and small, sequential input/output rather than large, sequential I/O.
What this all means in a nutshell is, you may or you may not see a speed increase. If you do, it will be minimal and it only will speed up depending on what operations your computer is using. Don't expect to see a large increase in speed, such as gaming graphics, etc. You might notice applications starting up faster or performing certain operations faster, but you also have to give it time. The more you use the computer with Readyboost installed, the better Readyboost will perform, but again, the results will be negligible.